If women feel that running a business has been a challenge, there may be some respite coming soon. U.S. Sen. Maria Cantwell, (D-Wash), Chairwoman of the Senate Committee on Small Business and Entrepreneurship and several other Senators have introduced new legislation. The bill is designed to provide female entrepreneurs with better and more equal treatment in starting and growing a business.
A History of the Issues
While women own a whopping 10.6 million businesses in the US, they still find it harder to secure business loans than men do. Out of every $23 lent to small businesses, only $1 goes to a woman-owned business, according to a report issued(PDF) by the committee. Women entrepreneurs are seeing this challenge at every level of financing and investment, from micro loans and venture capital to conventional loans.
Women also historically haven’t had equal access to government contract opportunities. Twenty years ago, Congress set a government-wide goal of awarding 5% of government contracts to women-owned businesses. But guess what? That goal has never been achieved. And so women keep missing out on $4 billion in federal contracts each year.
Another project the U.S. government has left fall by the wayside is the growth of the Small Business Administration’s Women’s Business Centers (WBC), designed to provide women with training and additional resources. Without funding, these centers have stagnated and haven’t fulfilled their potential in serving women nationwide.
All of these factors have been deterrents to more women jumping into business ownership. And all are points the proposed “Women’s Small Business Ownership Act of 2014” would address.
What The Bill Will Do
If passed, here are some of the specific issues the bill is designed to address.
Improve Lending Opportunities for Women Owned Businesses
The Act would expand and improve the SBA’s microloan and intermediary lending program to reach women who need $50,000 or less for their businesses. It would also enable women who need more — up to $200,000 — to get better access to these loans. Microlenders would have a higher lending cap of $7 million, which would allow them to approve more loans to women.
Boost the Women-Owned Small Business Federal Contract Program
This would put women-owned businesses on equal ground with other disadvantaged groups when bidding on federal contracts and move Congress closer to its 5% goal.
Increase Funding for the Women’s Business Center Program
The Act would expand services and provide more counseling and training to female business owners, especially those in lower-income regions of the country.
Gather Data on Women-Owned Businesses
To date, there’s never been substantial research on female-run businesses. This Act would set a 2015 deadline for the SBA to determine industries where women are under-represented.
Image: Maria Cantwell website
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It really gets me when I read these posts. I’ve always considered women and men to be equal, but the numbers are proof that’s unfortunately not the case. Hopefully this bill helps out a bit.
I know. I feel the same. But the numbers obviously show a different experience, right?
I feel the same way. It is nice that there is now someone who is concerned about women’s welfare.
I’m not a huge fan of using more regulation to fix ineffective previous regulations, but the funding of the previous program sounds like a good idea.
While this all sounds great – I am not sure that it will do any good except give these senators some exposure. Microloan programs do not discriminate against women. SBA loan programs do not discriminate. And, gathering more data on women in business will just go to show what we already know. The only thing I see helpful here is funding Women Business Center Programs.
Look the solution is not to tell lenders that they cannot discriminate – they either already know that or don’t care. The solution is to let women know that they are empowered enough to not take no for an answer or to actually apply for capital. Many women think that they will be turned down because of their gender or because of their business – this is what we have to change – to let women know that they can do it and should do it – then back them up when they get out there and try.
We have already seen how beneficial it is when women get in positions to support other business – not because they provide them something special that other professions or industries will not but because it empowers women to actually get out there and try.